U.K. Inflation Eases to Lowest in 16 Months on Holiday Discounts, BRC Says
U.K. shop-price inflation slowed in December to the lowest in 16 months as retailers discounted electrical goods and clothes to lure holiday shoppers, the British Retail Consortium said.
Retail prices rose 1.7 percent from a year earlier, down from 2 percent in November, the trade group and Nielsen Co. said in an e-mailed report in London today. A separate report from KPMG LLP showed hiring for full-time jobs dropped for a third month in December.
Slowing inflation may ease pressure on consumers and help encourage domestic demand this year. The Bank of England, which will probably maintain its emergency stimulus for the economy tomorrow, has forecast that consumer-price growth will slow sharply in the coming months.
“This is a good bit of New Year news for customers,” Stephen Robertson, BRC director general, said in a statement. “Consumers are likely to rein in spending in the wake of Christmas and price will remain the key battleground between retailers.”
Food prices gained an annual 4.2 percent in December, up from 4 percent in November, while inflation on non-food products slowed to 0.3 percent from 0.8 percent, today’s report showed. On the month, overall prices fell 0.1 percent.
KPMG and the Recruitment and Employment Confederation said an index of hiring of full-time staff rose to 48.5 in December from 48.2 the previous month. A measure of demand for temporary staff dropped to 49 from 50.9 in November. Readings below 50 indicate contraction.
The Bank of England’s Monetary Policy Committee will maintain its bond-purchase target at 275 billion pounds ($426 billion) tomorrow, according to all but one of 41 economists in a Bloomberg News survey. It will also maintain its benchmark interest rate at a record low of 0.5 percent, according to a separate survey of 53 economists.
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